Senwes Scenario June / July 2019 - Page 34

GRAIN BROKERS MARKETS El Niño years Market opportunities  By Frans Dreyer Manager: Senwes Grain Brokers By Hansie Swanepoel Senwes Grainlink Market analist THIS ARTICLE IS the fourth in a series in which we look at the background, origin and development of ENSO (El Niño Southern Oscillation) events. The previous edition focused on the specific classification of ENSO in the form of a medium to strong El Niño event. The current season is officially classified as a weak El Niño type season. The season thus far has been the oppo- site of what is expected of El Niño seasons. An El Niño type season is normally a bit wetter in the early part of the year and dryer later in the year. The early part of the season was dryer than what it had been since the 1915/16 season in various districts. Autumn, particularly in respect of April rain, was the wettest since accurate rainfall records commenced. This applied in respect of particularly the western part of the Senwes area. This realisation confirms that it would always be risky to base production or marketing decisions on the historic devel- opment of ENSO events only. The first reason for this is that the occurrence of El Niño, La Niña and neutral types of sea- sons is reasonably random. PRODUCERS ARE AT the point where they have to make deci- sions about the tonnages harvested - should it be marketed or should it be bought back in the market? The possibilities in this regard are: for producers after the harvest What happened in the past? Die voorkoms van El Niño, La Niña en neutrale episodes (1923-2019 La Niña El Niño Neutraal Voorkoms van die episodes Aantal kere ’n groter oes as bewegende gemiddeld 29 17 34 10 33 22 Aantal kere ’n kleiner oes as bewegende gemiddeld 6 17 10 Maksimum positiewe afwyking op lopende gemiddeld 46.8% 35.1% 55.1% Maksimum negatiewe afwyking op lopende gemiddeld 13.1% 59.30% 20.1% 121.85% 83.84% 110.6% Opbrengsrealisasie as % van gemiddelde opbrengs. When focusing on La Niña events and the impact of such seasons on yield potential, the picture is as follows: La Niña seasons normally realise higher yields than the 5-year running average yields. There has been a few excep- tions in the past. Producers approach a La Niña type season with more confidence since it is usually a more moderate season, with yields being more stable. Read the full article by clicking on the link http:// senwes.co/frans19 or scan the QR code. 32 SENWES SCENARIO | WINTER 2019  Harvest and sell  Buy back in the market  Storage with the possibility of selling at a later stage The market this year is characterised by maize closing stock levels which should be sufficient (as at the time of writing) to meet the current needs. However, there is room for upward and downward movements over the course of the season. Oilseed closing stock levels should be fairly low and there is suffi- cient room for price movements. Table 1: NAMC 2019/20 supply and demand figures (3 May) White Maize Yellow Maize Total Maize Hectares Planted Yield CEC Crop Estimate CEC Retention 1 298 400 4.07 5 286 540 160 000 1 002 100 5.36 5 368 820 350 000 2 300 500 4.63 10 655 360 510 000 Opening Stock Producer deliveries Imports Early Deliveries (Nett) Surplus Total Supply 1 824 084 5 126 540 - 20 000 5 000 6 975 624 969 575 5 018 820 450 000 - 10 000 6 448 395 2 793 659 10 145 360 450 000 20 000 15 000 13 424 019 Processed for local market -human -animal -gristing Other Local Demand 5 482 000 4 650 000 820 000 12 000 44 000 5 526 000 5 216 545 4 660 11 195 5 411 500 000 000 500 000 500 10 698 500 5 195 000 5 480 000 23 500 239 000 10 937 500 Exports Products Whole maize Total Demand 620 70 550 6 146 400 150 250 5 811 000 000 000 500 1 020 220 800 11 957 000 000 000 000 000 000 000 500 Ending Stock 829 624 636 895 1 466 519 Processed per month (local) Months’ stock Days’ stock 456 833 1.8 55 434 708 1.5 45 891 542 1.6 50 Read the full article by clicking on the link http://senwes. co/hansie19 or scan the QR code.